Jim's Morning Markets Report--July 31

July 31, 2013 01:52 AM
 

Wednesday, July 31--Jim Wyckoff's Morning Web Log

* LATEST MARKET DEVELOPMENTS *

The first day of a bunch of highly anticipated and
major economic data is at hand Wednesday, starting
with the U.S. gross domestic product reading for
the second quarter. The consensus forecast for the
GDP figure is up 0.9%. Next comes the Wednesday
afternoon U.S. Federal Reserve FOMC meeting
statement. Most expect the Fed will leave its
monetary policy unchanged and continue to lean well
to the dovish side. Many Fed watchers are actually
looking ahead to the next FOMC meeting, in
September, at which time the central bank could
begin its much-anticipated "tapering" of its
monthly bond-buying program, also called
quantitative easing. On Friday awaits the key U.S.
jobs report. The key non-farm payrolls figure is
forecast to rise by around 175,000 workers in July.
The overall unemployment rate is expected to have
declined by 0.1%, to 7.5%. European traders are
awaiting the European Central Bank and Bank of
England monthly meetings that occur on Thursday.
Asian traders and investors are awaiting
manufacturing data from China, due out Thursday.
The raw commodity bulls got some encouragement
coming out of China overnight. Chinese government
officials said Wednesday they will maintain a
steady economic growth pace despite "highly
complicated" conditions at present. The statement
came after a meeting of the Chinese politburo. Also
on Wednesday the Chinese central bank injected
money into its financial system for the first time
since February, in a signal of easier monetary
policy. In a significant development coming out of
the European Union Wednesday, a German government
debt auction saw its 30-year bond fetch a yield of
2.47%. That’s a significant rise from Germany’s
last 30-year bond auction and the highest yield on
the 30-year bond in a year and a half. Such
suggests two things: First, European investors are
less concerned about the European Union sovereign
debt crisis spinning out of control again as their
risk appetite has increased. Recent EU economic
data has been just a bit more upbeat. Second, the
higher German bond yields suggest inflationary
pressures are creeping back into the world market
place. The rise in German bond yields is a mixed
bag for gold. Better investor risk appetite in
Europe could pull money away from safe-haven gold.
However, the inflationary implications from the
rise in German yields are bullish for gold and the
raw commodity sector, in general. U.S. economic
data due for release Wednesday includes the weekly
MBA mortgage applications survey, the national ADP
employment report, the second-quarter GDP, the
employment cost index, the U.S. Treasury’s
quarterly refunding announcement, the ISM-Chicago
business survey, and the weekly DOE liquid energy
stocks report.--Jim
   
U.S. STOCK INDEXES

S&P 500 futures: Prices are near steady early
today. Bulls have the solid overall near-term
technical advantage as prices hover not far below
the recent record high. The shorter-term moving
averages (4-, 9- and 18-day) are neutral early
today. The 4-day moving average is below the 9-day.
The 9-day is above the 18-day moving average.
Short-term oscillators (RSI, slow stochastics) are
neutral to bearish early today. Today, shorter-term
technical resistance comes in at last week’s record
high of 1,695.50 and then at 1,700.00. Buy stops
likely reside just above those levels. Downside
support for active traders today is located at this
week’s low of 1,677.00 and then at last week’s low
of 1,670.50. Sell stops are likely located just
below those levels. Wyckoff's Intra-day Market
Rating: 5.0

Nasdaq index futures: Prices are slightly higher
early today. The bulls have the solid overall near-
term technical advantage as prices Tuesday hit a
12-year high. The shorter-term moving averages (4-
9-and 18-day) are bullish early today. The 4-day
moving average is above the 9-day. The 9-day
average is above the 18-day. Short-term oscillators
(RSI, slow stochastics) are bullish early today.
Shorter-term technical resistance is located at
Tuesday’s high of 3,094.75 and then at 3,100.00.
Buy stops likely reside just above those levels. On
the downside, short-term support is seen at the
overnight low of 3,079.25 and then at this week’s
low of 3,056.75. Sell stops are likely located just
below those levels. Wyckoff's Intra-Day Market
Rating: 5.5.

Dow futures: Prices are slightly lower early today
on mild profit taking. Bulls still have the solid
near-term technical advantage. Buy stops likely
reside just above technical resistance at the
record high of 15,545 and then at 15,600. Sell
stops likely reside just below technical support at
Tuesday’s low of 15,430 and then at 15,400.
Shorter-term moving averages are bullish early
today, as the 4-day moving average is above the 9-
day. The 9-day moving average is above the 18-day
moving average. Shorter-term oscillators (RSI, slow
stochastics) are neutral to bearish early today.
Wyckoff's Intra-Day Market Rating: 5.0

U.S. TREASURY BONDS AND NOTES

September U.S. T-Bonds: Prices are slightly lower
early today. Bears have the solid overall near-term
technical advantage. Shorter-term moving averages
(4- 9- 18-day) are neutral early today. The 4-day
moving average is below the 9-day and 18-day. The
9-day is above the 18-day moving average.
Oscillators (RSI, slow stochastics) are neutral to
bearish early today. Shorter-term resistance lies
at the overnight high of 134 1/32 and then at
Tuesday’s high of 134 14/32. Buy stops likely
reside just above those levels. Shorter-term
technical support lies at the overnight low of 133
16/32 and then at 133 even. Sell stops likely
reside just below those levels. Wyckoff's Intra-Day
Market Rating: 4.5
 
September U.S. T-Notes: Prices are slightly lower
early today. Bears have the overall near-term
technical advantage. Shorter-term moving averages
(4- 9- 18-day) are neutral early today. The 4-day
moving average is below the 9-day. The 9-day is
above the 18-day moving average. Oscillators (RSI,
slow stochastics) are bearish early today. Shorter-
term resistance lies at the overnight high of
126.15.5 and then at Tuesday’s high of 126.21.0.
Buy stops likely reside just above those levels.
Shorter-term technical support lies at the
overnight low of 126.06.5 and then at 126.03.0 Sell
stops likely reside just below those levels.
Wyckoff's Intra-Day Market Rating: 4.5

U.S. DOLLAR INDEX

The September U.S. dollar index is slightly higher
in early U.S. trading, on tepid short covering.
Bears still have the overall near-term technical
advantage. Slow stochastics for the dollar index
are bullish early today. The dollar index finds
shorter-term technical resistance at the overnight
high of 82.035 and then at Tuesday’s high of
82.090. Shorter-term support is seen at the
overnight low of 81.775 and then at this week’s low
of 81.610. Wyckoff's Intra Day Market Rating: 5.0

NYMEX CRUDE OIL

Crude oil prices are slightly higher early today on
short covering after prices Tuesday hit a three-
week low. Bulls still have the slight overall near-
term technical advantage but have faded. In
September Nymex crude, look for buy stops to reside
just above resistance at $104.00 and then at
Tuesday’s high of $104.54. Look for sell stops just
below technical support at Tuesday’s low of $102.67
and then at $102.00. Wyckoff's Intra-Day Market
Rating: 5.0

GRAINS

Markets were mixed in overnight trading. The grain
market bears are still in near-term command. The
U.S. Corn Belt weather is non-threatening for the
corn and corn and soybean crops and that’s fully
bearish. The important worldwide economic events
that begin Wednesday and end on Friday could have a
significant impact on grain futures prices. So
watching the key outside markets the rest of this
week—the U.S. dollar index and crude oil--will be
extra important for grain traders.
 

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